Osaka Gas shares drop after cutting annual profit forecast on Freeport LNG outage
TOKYO, Aug 2 (Reuters) - Shares in Osaka Gas (9532.T) fell on Tuesday after the Japanese city gas supplier sharply cut its annual net profit forecast due to a nearly 80 billion yen ($611 million) hit from an outage at U.S. liquefied natural gas export facility Freeport LNG.
After falling as much as 5.5%, Osaka Gas shares had pared some losses and were trading down 2.3% by mid-afternoon. The benchmark Nikkei 225 index (.N225) was down 1.5%.
A blast and fire on June 8 had knocked out Freeport LNG's 15 million tonnes per year (mtpa) Quintana plant, exacerbating global LNG shortages amid reduced gas flows from Russia, and weighed heavily on domestic U.S. natural gas prices. read more
Osaka Gas, which buys 2.32 million tonnes of LNG from Freeport a year under a long-term contract and owns a stake in the project, on Monday slashed its net profit forecast by 62% for the year to March 31 to 31.5 billion yen from its April estimate of 82 billion yen, citing the negative impact of 79.5 billion yen from the shutdown of Freeport LNG.
The damage includes a one-off charge of 31.4 billion yen booked in the April-June quarter and higher procurement costs among others, the company said.
Osaka Gas has warned in July that it might book a large expense, including the cost for alternative procurement during the Freeport's shutdown period and change of the contract.
Freeport LNG estimates resumption of partial liquefaction operations by early October and a return to full production by this year-end.
($1 = 130.8300 yen)
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